Post on 11-Mar-2018
Executive Summary
A Multisectoral Perspective
Tobacco Tax Reform
AT THECROSSROADS OF HEALTH ANDDEVELOPMENT
Prepared by a team led byPatricio V. Marquez and Blanca Moreno-Dodson
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Tobacco Tax Reform • At the Crossroads of Health and Development
2 // Executive Summary
TOBACCO USE NOT ONLY KILLS MILLIONS OF PEOPLE EACH YEAR BUT PLACES A STAGGERING POVERTY AND ECONOMIC BURDEN ON LOW-INCOME FAMILIES
3
ACKNOWLEDGMENTSThis report was prepared under the lead of Patricio V. Marquez and Blanca Moreno-
Dodson, Co-Coordinators, World Bank Group Global Tobacco Control Program, with the
editorial contribution of Alexander Irwin, by an international team comprised of (by
chapter order):
Chapter 1: Patricio V. Marquez (Health, Nutrition and Population Global Practice,
World Bank Group)
Chapter 2: Prabhat Jha (Center for Global Health Research, St. Michael’s Hospital
and Dalla Lana School of Public Health, University of Toronto, Toronto, Canada) and
Richard Peto (Clinical Trial Service Unit and Epidemiological Studies Unit, Nuffield
Department of Population Health, Richard Doll Building, University of Oxford, Oxford,
United Kingdom)
Chapter 3: Blanca Moreno-Dodson (Global Tax Team, Governance Global Practice,
World Bank Group)
Chapter 4: Mark Goodchild (World Health Organization), Anne-Marie Perucic (World
Health Organization), Rose Zheng (University of International Business and Economics,
Beijing, China), Evan Blecher (World Health Organization), and Jeremias Paul (World
Health Organization)
Chapter 5: Annerie Bouw (European Commission)
Chapter 6: Rouselle F. Lavado (World Bank Group, now at Asian Development Bank),
Moritz Meyer (Poverty and Equity Global Practice, World Bank Group), Iryna Postolovska
(World Bank Group), and Renzo Efren Sotomayor (World Bank Group)
Chapter 7: Hana Ross (University of Cape Town, South Africa)
Chapter 8: Teh-Wei Hu (Public Health Institute’s Center for International Tobacco
Control, Oakland, California), Angela Lisulo (Consultant, World Bank Group), and
Melissa Brown (Agriculture Global Practice, World Bank Group)
Chapter 9: Enrique Fanta (Trade and Competitiveness Global Practice, World Bank
Group) and Magaly Garcia (World Bank Group)
TOBACCO USE NOT ONLY KILLS MILLIONS OF PEOPLE EACH YEAR BUT PLACES A STAGGERING POVERTY AND ECONOMIC BURDEN ON LOW-INCOME FAMILIES
Tobacco Tax Reform • At the Crossroads of Health and Development
4 // Executive Summary
Paul Isenman (former World Bank Group Director and Principal Economist) reviewed and
commented upon drafts of all portions of the report, providing extensive technical inputs
and suggestions, and enhancing the volume’s robustness and quality. Additional comments,
and technical inputs provided by Alan Fuchs (World Bank Group), Francisco Meneses (Duke
University, United States, and Universidad Adolfo Ibáñez, Chile), and Alberto Gonima
(Consultant, World Bank Group). Vito Tanzi, former Director of the Fiscal Affairs Depart-
ment at the International Monetary Fund (IMF), provided comments and
guidance on an initial version of different chapters in the report.
Sheila Dutta (World Bank Group) contributed to the Conclusions chapter, distilling the
main messages of the report.
Overall technical guidance and oversight provided by Enis Baris (Program Manager,
Health, Nutrition, and Population Global Practice, World Bank Group), and Tim Evans
(Senior Director, Health, Nutrition, and Population Global Practice, World Bank Group),
James Brumby (Director, Governance Global Practice, World Bank Group), Alma Kanani
(Program Manager, Governance Global Practice), and Marijn Verhoeven (Lead Economist,
and Cluster Lead of the Global Tax Team, Governance Global Practice, World Bank Group).
Akosua Dakwa (World Bank Group) provided administrative support.
The preparation of this report was carried out under the World Bank Global Tobacco
Control Program, supported by the Bill & Melinda Gates Foundation and the Bloomberg
Foundation.
The authors alone are responsible for the views expressed herein and they do not
necessarily represent the views, decisions or policies of the institutions with which
they are affiliated.
Washington, D.C.
September 26, 2017
Cover photos (clockwise from left): City view of Beirut, Lebanon. Photo by Dominic Chavez/World Bank. Flags by Simone D. McCourtie/World Bank. Terraced rice paddies in northern Vietnam. Photo by Tran Thi Hoa/World Bank. School children attending parade. South Africa. Photo by Trevor Samson/World Bank.
5
EXECUTIVE SUMMARYThere is a policy measure that can simultaneously save millions of lives, reduce poverty,
and increase countries’ domestic resources for financing development.
The policy measure consists of increasing excise tax rates on tobacco in order to reduce
its affordability and, as evidence shows, lower its consumption.
Today, this powerful human development and poverty reduction measure remains largely
underutilized, especially in low- and middle-income countries (LMICs). This report
provides decision support for policy makers on tobacco tax reform, as well as analytical
and empirical tools for using tobacco excise taxes to save lives and increase government
revenues. The report sets forth the public health, economic, and anti-poverty case for
higher tobacco taxes; shows how some countries have already delivered ambitious reforms;
and documents measurable results. It shows that, by implementing tobacco tax reforms
now, policy makers can choose a fast road to healthier, more prosperous societies.
THE TOBACCO USE CHALLENGEFew people today doubt that smoking is bad. But many, including seasoned policy makers,
do not realize just how bad it is. Bad for people, bad for economies, and bad for poverty
reduction. In fact, tobacco use not only kills millions of people each year but places
a staggering poverty and economic burden on low-income families and less-developed
countries that is deepening inequalities between and within countries.
Health DamageTobacco kills at least half of long-term smokers, accounting for more deaths each year than
HIV/AIDS, tuberculosis, and malaria combined. And the burden of sickness and death
from tobacco is becoming heavier. There were about 100 million deaths from tobacco in
the 20th century. If current patterns persist, tobacco will kill some 1 billion people in this
century, most in LMICs (Jha 2009; Peto and Lopez, 2001). Health systems suffer along with
individuals. Treatment of the numerous chronic diseases caused or exacerbated by smoking
swells countries’ annual health care costs and diverts resources that could be used to
solve other health challenges or address development priorities.
Tobacco Tax Reform • At the Crossroads of Health and Development
6 // Executive Summary
Economic Damage Tobacco-related deaths are not only preventable tragedies but have an important
economic cost. Worldwide, the total economic damage of smoking (including productivity
losses from death and disability) has been estimated at more than US$ 1.4 trillion
per year, equivalent to 1.8 percent of the world’s annual Gross Domestic Product (GDP)
(Goodchild, Nargis, and Tursan d’Espaignet 2017).
Worsening PovertyThis economic burden mainly falls on the people and countries that can least afford it.
More than 80 percent of the world’s smokers live in LMICs. Within countries, tobacco
addiction is concentrated among people with lower incomes and education (Figure ES 1).
Poor smokers spend a larger portion of their income on tobacco products than wealthier
smokers, and the poor also suffer most from smoking-related illnesses. The medical
expenses and loss of earnings associated with these illnesses contribute to pushing
millions of households into financial crisis and deeper poverty every year. Meanwhile,
tobacco use reduces future earning potential, especially among young adults, and reduces
adult workers’ economic productivity.
40
35
30
25
20
15
10
5
0Q1 (poor) Q2 Q3 Q4
Income
Q5 (rich)
3837
23
1918
1513
35
32
33
30 30 3028
31
LICLMICUMICSm
okin
g pre
valen
ce (%
of m
ale p
opul
ation
ages
15–4
9)
Figure ES1: Adult Male Smoking Prevalence by Country Income Classification and Quintile of the Welfare Distribution
Data Source: Demographic and Health Surveys (DHS) latest year since 2007; World Bank income classification.
7
THE TOBACCO TAX IMPERATIVEThere is an extraordinary divergence between high-income countries, which are increasingly
using price and non-price tools to lower their death rates from tobacco, and LMICs, where
the absolute number of tobacco deaths continues to grow. About half of the difference in
mortality rates between rich and poor smokers is due to smoking. Equality of opportunity
between countries worldwide demands action on tobacco.
By adopting the United Nations Sustainable Development Goals (SDGs), all countries have
committed to achieving a 30 percent reduction in death rates from non- communicable
diseases like cancer, stroke, and heart disease by 2030. Reducing tobacco use is critical for
countries to reach this goal (Jha, Marquez, and Dutta 2017). How can LMICs cut smoking rates
on the scale required and achieve faster progress than even that achieved by high-income
countries? Bold increases in tobacco excise tax rates are by far the most powerful tool.
Leaders who raise tobacco excise tax rates can expect the following:
Longer lives and better health for the people: The main reason to implement tobacco
excise tax rate increases is that they save lives and reduce serious illnesses like cancer and
heart disease. Evidence across a wide range of countries shows that a 50 percent increase
in cigarette price typically leads to a 20 percent decline in cigarette consumption (Figure ES2).
Reduced consumption has a powerful impact on subsequent tobacco-related sickness and
Num
ber/a
dult/
day a
nd d
eath
rate
s
Year
Lung cancer death rates per 100,000(divided by four); men age 35–44
Number cigarettes/adult/day
Relative price Price
(% re
lative
to 19
80)
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
300
250
200
150
100
501980 1985 1990 1995 2000 2005 2010
Figure ES2: Smoking, Male Lung Cancer, and Cigarette Price: France 1980–2010
Source: Jha (2012). The lung cancer death rates per 100,000 are divided by 4, so as to enable these to be on the same scale as smoking amount per day.
Tobacco Tax Reform • At the Crossroads of Health and Development
8 // Executive Summary
death within several years. About half of this effect comes from getting current smokers
to quit. Higher tobacco prices also reduce smoking initiation among young people and so
help stop them from becoming addicted to tobacco in the first place (IARC 2011).
More resources for development: Even as they lower cigarette use and improve
population health, higher tobacco taxes can substantially boost government tax revenues.
Economic modeling carried out for this report shows that raising cigarette excise tax
rates in all developing countries by the equivalent of US$ 0.25 per pack would generate
an extra US$ 41 billion in government tobacco excise revenue for LMICs: raising these
countries’ tobacco excise revenue intake by 29 percent from the 2014 level. This additional
revenue could fund development investments (see also Goodchild, Perucic, and Nargis 2016).
EARLY WINS IN SOME COUNTRIES The links between tobacco taxes, public health, and government revenues are not just
theoretical. Between 2012 and 2014, over a hundred governments used tobacco tax hikes
to save lives and increase government revenues. In most cases these tax hikes were still
too small to yield substantial declines in cigarette consumption. But this report shows
that some countries are taking bolder steps and reaping significant public health and
fiscal revenue benefits. It also shows that much more can be achieved. As of 2015, WHO
reported that only 28 LMICs had adopted comprehensive tobacco control policies covering
retail-counter cigarette advertising, restrictions on public smoking, and appropriately high
excise tax rates. As leaders in more countries weigh the public-health and economic
arguments for tobacco taxation, there are opportunities for exceptional progress now.
MAKING IT HAPPEN If leaders want to move forward on tobacco excise taxation, what are the critical steps?
What are the common pitfalls they should avoid? This report distills a large body of
evidence on successful practice in tobacco taxation and the decision-making process.
Key lessons include:
• Go big, go fast. Tax strategies should focus on health gains first, then on fiscal
benefits. This means going for big tobacco excise tax rate increases starting early in
the process. Adopting a slow, cautious timeline might sound prudent. But it means
condemning large numbers of people to avoidable illness and premature death.
In tobacco taxation, the rewards go to those who act boldly.
• Attack affordability. Tobacco taxes only reduce tobacco consumption if they reduce
cigarette affordability. In most LMICs, wages are rising. Thus, cigarettes will become
9
de facto more affordable for consumers, increasing consumption, unless tobacco taxes
rise even faster. Effective strategies will generally involve combining big initial tax
increases with recurrent hikes over time, to keep cigarette prices climbing more steeply
than per capita real income growth (including inflation).
• Change expectations. Communication with the public is also critical. Governments
must make sure consumers know that a tax-rate hike is not just a one-off, but that
cigarette prices will keep going up. This is a motivator for current smokers to quit and
young people not to start.
• Tax by quantity. Tobacco tax rates should be simplified and based on the quantity
of cigarettes, not their price. This is done in two ways, both of which preempt smokers’
switching to cheaper cigarette brands after a tax-rate hike on the brands they previously
smoked (a response called “downward substitution”). The first key move is to use specific
excises, as opposed to ad valorem (value-based) excises or other taxes. A key factor that
needs to be taken into account is that specific rates require to be adjusted over time
to at least keep pace with inflation and, preferably, at a faster rate so that affordability is
reduced over time. Any strategy for adopting them should be therefore accompanied
by a framework/instrument to allow for annual increases over time (such as the United
Kingdom’s tobacco duty escalator). The second is to merge the multiple tobacco tax “tiers”
used by most developing countries. This way, tax hikes raise prices by the same large
amount on all brands at once, pushing smokers to quit completely, rather than switch.
• “Soft earmarks” can win support. Earmarking tax revenues through legislation
is criticized by fiscal experts as contributing to rigidities, fragmentation, and eventual
distortions in public expenditures. However, “soft” earmarking of funds — for example,
linking increased taxes to increased health spending — has helped generate grass-
roots support for the tax hikes. This has been shown by experience in other sectors,
and it has worked for tobacco taxes in countries like Australia, Philippines, and
the United States.
• Regional collaboration can boost results. Momentum for ambitious tobacco
tax reform can be enhanced, and cross-border threats like cigarette smuggling
minimized, when countries work together in a regional structure. The European
Union (EU) provides an example. The EU experience shows that regional cooperation
can help countries achieve the dual goals of reducing tobacco consumption while
increasing government revenues. Lessons also concern the pace of reforms. EU
lawmakers faced early political pressure to “go slow,” by setting a low initial minimum
tobacco excise rate to apply to all Member States. However, the EU accelerated
progress by convincing Member States to agree up front to relatively high minimum
tobacco excise rates, with longer transition periods authorized for some countries
facing special challenges.
Tobacco Tax Reform • At the Crossroads of Health and Development
10 // Executive Summary
• Build broad alliances. Country leaders face sharp resistance to tax rate increases and
other tobacco control measures from the tobacco industry. The industry is both
financially powerful and politically astute. Tobacco industry advice to governments
promotes the most ineffective interventions and in particular seeks to undercut
and weaken tax measures. To counter these pressures requires robust scientific and
economic analysis, as well as multi-sectoral policy development. It also demands
the mobilization of civil society and opinion leaders. Support from international
partners is also required, particularly in low-income countries, to strengthen country
capacity for lining up and coordinating all parts of government, while engaging a
wide set of stakeholders outside of government.
KEY POLICY CHALLENGESAs countries plan and implement tobacco tax rate increases, they should anticipate
challenges in specific areas. Several issues are important, both intrinsically and because
the tobacco industry exploits them to influence public opinion and policy debates.
The three most salient of these issues are: (1) how higher tobacco tax rates affect
poor people; (2) how tobacco taxes affect employment; and (3) connections between
tobacco tax rate hikes and the illicit tobacco trade.
TOBACCO AND EQUITY: PUTTING POOR PEOPLE AT THE CENTER As noted above, accumulated evidence from across the globe shows how tobacco taxes
help reduce poverty. Yet one of the industry’s most insidious arguments against raising
tobacco taxes is that these taxes hurt poor people disproportionately. This is based on
the claim that tobacco taxes are regressive: meaning that they take a greater share of
disposable income from the poor than from the rich. Almost by definition, poor smokers
do generally spend a greater proportion of their incomes on tobacco than wealthier
smokers. However, poorer smokers respond more to a unit change in price than do richer
smokers. Thus, tobacco tax hikes more effectively reduce cigarette affordability among
poor people than among the rich. Reducing cigarette affordability does not hurt poor
smokers. On the contrary, it will increase their disposable income for other goods and
services, and can save many of their lives.
Faced with tobacco tax rate increases, relatively poorer households adjust their behavior
relatively more than richer households. A 50 percent increase in cigarette prices will lead
to a 30-40 percent decline in tobacco consumption for the poor, a much larger relative
decline than among the rich. This also means that poor people get the largest share of
11
health and economic benefits from smoking cessation following a tax rate hike. Evidence
from Thailand, for example, shows that the poor paid only 6 percent of increased tobacco
taxes but got 58 percent of the health benefits (Jha, Joseph, Moser, et al. 2012).
The health benefits poor people obtain by quitting smoking also translate into long-term
economic gains. Households in which someone smokes earn less over time than otherwise
similar households where there are no smokers. So by favoring smoking cessation among
people at the lower end of the welfare scale, tobacco taxes boost incomes among the
poor relative to the better-off, directly advancing equity.
The bottom line is this: when we look at all the facts, tobacco taxes are not regressive, but
highly progressive, as the full health and economic benefits of this measure far outweigh
its relative cost.
TOBACCO TAXATION AND EMPLOYMENT: BRIDGING TO BETTER LIVELIHOODSThe tobacco industry warns of potential job losses in agriculture, manufacturing, and
distribution as an argument against higher tobacco taxes. However, governments can
help facilitate the adjustment of the relatively small numbers of vulnerable workers
whose jobs will be affected by tobacco tax rate increases.
On tobacco taxes and employment, the following points merit attention:
• Job losses in tobacco worldwide have come mostly from manufacturers’ own
policies, not from tax hikes. Analysis has shown that observed reductions in
tobacco-related employment have come largely from automation and consolidation
by the industry itself (NCI and WHO 2016).
• Today, few jobs in LMICs are completely dependent on tobacco, even in large
producer countries. With few exceptions, the share of total employment involved with
tobacco is already very small. Even China, the world’s largest producer and consumer of
tobacco products, has only about 2 percent of its farmers growing tobacco (Hu, Mao,
Shi et al. 2008).
• Following a tobacco tax rate hike, consumer spending shifts to non-tobacco
sectors, creating alternative jobs. When cigarette consumption drops after a tax rate
hike, money not spent on tobacco products will mostly flow to other economic sectors,
stimulating their production and so creating jobs there, while contributing to economic
diversification. Studies show that over time there is likely to be a net gain rather than a
loss in employment in nearly all countries that raise tobacco excise rates (IARC 2011;
NCI and WHO 2016).
Tobacco Tax Reform • At the Crossroads of Health and Development
12 // Executive Summary
• Tobacco tax plans must nonetheless incorporate support for affected
workers, especially those with low skills. Though the numbers are small, some
tobacco workers who lack skills to adapt will lose employment and income, as demand
for tobacco falls. Governments must anticipate this challenge and be ready with
solutions. Successful transitions can be achieved, helping workers access equal or better
livelihoods outside tobacco. Policy makers should tackle this issue head-on: on equity
grounds, to assist vulnerable workers and their families; and for strategic reasons, to
prevent the tobacco industry from appropriating employment as a political weapon
against tax rate increases.
Helping Tobacco Farmers Switch to Other CropsIn the very few countries that are net tobacco producers, an important share of employ-
ment in the tobacco industry comes from farming. Governments and their partners can
coordinate tobacco tax rate hikes with programs to encourage and help tobacco farmers’
transition to other crops. In virtually all settings, alternative crops exist that are both more
profitable for farmers than tobacco and without the health risks of tobacco farming, which
include green tobacco sickness, a systemic poisoning due to nicotine exposure through
contact with tobacco plants.
Today, only a minimum percentage of farmers rely exclusively on tobacco for their livelihoods.
In most settings, tobacco is part of multi-cropping schemes, and where demand is
decreasing farmers are diversifying away from dependence on tobacco. Tobacco cultivation
is a small and shrinking contributor to economies worldwide. However, targeted support,
for example through input credits, agricultural extension, and irrigation, will be needed
for some small tobacco farmers, particularly those who are trapped in dependency on the
tobacco industry. Industry practices foster such dependency, for example by providing
farmers with free inputs and guaranteed purchase of their entire tobacco crop, though
often at such low rates that farmers fail to break even and end up in chronic debt to the
firms (Kagaruki 2010).
CURBING THE ILLICIT TOBACCO TRADE The tobacco industry counsels policy makers that raising tobacco tax rates will spur
increases in the illicit tobacco trade, while lowering tobacco tax rates might reduce such
criminal activity. The key message for governments on this point is clear: even in the
presence of substantial levels of smuggling, higher tobacco tax rates cut cigarette con-
sumption and raise fiscal revenues. Evidence from Canada, which has 3000 miles of open
border with the United States, shows that large-scale smuggling occurred only when
13
the cigarette industry colluded with criminal networks (Kelton and Givel 2008). The main
driver of the illicit tobacco trade is not higher tax rates but lax enforcement and organized
criminal networks. The core strategy for governments remains to go after the criminals
and improve tax administration and enforcement of control measures, not to lower
tobacco taxes. Turkey, for example, substantially reduced illegal sales by tackling evasion,
and simultaneously raised taxes.
A robust repertoire of proven control and enforcement measures exist to curb illicit
tobacco. Measures have been successfully implemented by LMICs, as well as rich countries.
Many are captured in the WHO Protocol to Eliminate Illicit Trade in Tobacco Products.
Effective tools include track-and-trace systems to follow tobacco products through the
supply chain; detection equipment at customs posts; and tougher sanctions. Today, it
is imperative that the international community advocate and encourage national
lawmakers in all countries to ratify and implement the WHO Protocol, securing its status
as binding international law (Marquez 2015). Many countries that have adopted broad
control and enforcement programs have achieved impressive results. For example, since
the “Tackling Tobacco Smuggling” strategy was introduced in the U.K. in 2000, the size
of the illicit cigarette market has been cut by almost half, to about 9 percent of national
sales, with more than 20 billion cigarettes and over 2,700 tons of hand-rolling tobacco
seized (Figure ES3). Additionally, the U.K. has seen more than 3,300 criminal prosecutions
for tobacco offenses following action by law enforcement officers. In Chile, a country
that has one of the highest tax rates on cigarettes in the world, with taxes accounting
for 78 percent of the price of each pack, the government has also achieved success
in increasing seizures of smuggled tobacco products. This has affected the country’s
tobacco supply and is helping curtail the slight growth in illicit trade observed after a
2013 increase in tobacco prices.
THE ROAD AHEAD As we move into the third decade of the 21st century, the achievement of smoke-free
societies should be a critical marker of sustainable development. Advancing tobacco
taxation today requires intensified efforts in the following areas:
Demand-driven technical assistance to countries. Effective technical assistance
requires sharing good practice experiences and engaging high-level government officials
from Ministries of Finance and Health, together with multilateral and bilateral organiza-
tions and civil society. Higher and better-structured tobacco taxes should be increasingly
a default part of broader tax-system and fiscal reforms.
Tobacco Tax Reform • At the Crossroads of Health and Development
14 // Executive Summary
Capacity development and knowledge sharing. Countries that have successfully
raised tobacco taxes have gained valuable expertise and can share evidence and good
practices with others. The global community must also be ready to respond to country-
level demand for further capacity development. This should include capacity building on
the use of simulation models, which can assess fiscal and health implications of alterna-
tive tax levels and structures.
Further strengthening the global evidence base. In addition to fostering knowledge
exchange between countries, the global tobacco-taxation evidence base should be
deliberately reinforced in the following areas:
• Progressivity, employment, and poverty: Current evidence indicates that
tobacco taxes are highly progressive on a net basis, given that the poor are more
price responsive and so gain greater health benefits than the rich. To complete this
picture, we need additional country-specific examples of the impacts of tobacco
taxation on poverty, health, and employment.
• Better economic surveillance: There is a need for global efforts to create rapidly
accessible data on tobacco prices, illicit sales, and demand for tobacco products, along
with better tracking of industry practices. This includes a much stronger information
base concerning the response to non-price strategies, most specifically industry efforts
to subvert bans on tobacco and advertising and efforts to lobby Ministries of Finance.
• Illicit trade: Research as well as technical assistance is needed to strengthen
countries’ institutional capacity to curtail illicit tobacco trade through customs and
related instruments. This should be incorporated within a broader package of
public-sector modernization efforts.
Driving policy change nationally and globally. This report has identified national
policy entry points and shown how regional collaboration can also strengthen results.
Global treaties can provide additional leverage for change. One such treaty is the WHO
Protocol to Eliminate Illicit Trade in Tobacco Products, a supplementary agreement to the
WHO Framework Convention on Tobacco Control. Forty formal country ratifications are
needed to make the Protocol binding international law, but the total has not yet been
reached. It is imperative that the international community encourage lawmakers from all
countries and across the political spectrum to ratify and implement the Protocol. Lives
and the social well-being of nations depend on it. This is just one example of how global
collaboration can support national policy action, while country-level choices (e.g., treaty
ratification) can empower global policy instruments for the common good. National and
global policy action reinforce each other.
15
CONCLUSION: EXPANDING THE GLOBAL COALITION Higher tobacco tax rates could save millions of lives each decade, reduce poverty, and
boost public resources for development investment. Yet, today, tobacco taxation remains
one of the world’s least-used tobacco control measures (Marquez 2017).
The power to change this situation exists. Not in the hands of any single leader or
institution, but in a global coalition uniting governments, multilateral agencies, civil
society, researchers, the private sector, and communities: a coalition dedicated to
ensuring that the life-saving impact of tobacco tax reform reaches the largest possible
number of people in the shortest possible time.
Since 2015, the World Bank Group, WHO, the Bill & Melinda Gates Foundation, the
Bloomberg Foundation, and others have worked with countries to reinforce the global
coalition for tobacco tax reform. In April 2017, the conference “Tobacco Taxation:
Win-Win for Public Health and Domestic Resource Mobilization” provided an opportunity
to measure progress. Convened at World Bank Headquarters in Washington, D.C., this
tobacco tax policy summit drew high-level delegations from the Health and Finance
Ministries of 35 countries, who reported on progress and committed to further accelerate
reforms. Participants noted that, as countries reframe their development finance plans
around domestic resource mobilization, the case for tobacco taxation increasingly resonates.
Measured against the distance to be traveled, these are still early steps. Countries acting
boldly remain outnumbered by those that hesitate. The World Bank will leverage its
access to Ministries of Finance to further expand country-level policy dialog; ramp up
technical support and capacity building; nurture peer-to-peer collaboration among
countries; and advance a learning agenda to further improve tobacco tax policy designs,
hone advocacy, and increase impact.
Many countries stand at the crossroads on tobacco tax reform: a critical crossroads
for health and development. The good news is that countries and partners can come
together, not just around a problem, but around a proven solution. A stronger, united
effort is required to advance the global tobacco taxation agenda toward better health,
less poverty, and greater development opportunity for all.
Tobacco Tax Reform • At the Crossroads of Health and Development
16 // Executive Summary
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TOBACCO USE NOT ONLY KILLS MILLIONS OF PEOPLE EACH YEAR BUT PLACES A STAGGERING POVERTY AND ECONOMIC BURDEN ON LOW-INCOME FAMILIES
20 // Executive Summary